ILO supports a partnership approach in the Zambian mining sector to create jobs and stimulate inclusive growth

Mining is one of the main sources of formal employment in Zambia. Copper mining, for example, has attracted substantial foreign investment and seen robust growth over the past decade. Nevertheless, its full potential for the indirect creation of jobs has yet to be harnessed. The ILO is working with the government, and employers’ and workers’ organizations in the country, as well as with the Chamber of Mines and the mining companies to strengthen dialogues that can result in broader job creation and enterprise development. It is helping to identify new ways of establishing business linkages between large mining companies and local small and medium enterprises (SMEs) that will strengthen the sector’s capacity to create jobs.

Job creation: a national development priority

Mining is a key pillar of Zambia economy. It has continuously attracted a significant share of foreign direct investment (FDI), accounting for 86.5 per cent of total FDI in Zambia in 2011. In 2012, the number of miners in formal employment exceeded 90,000, representing 8.3 per cent of total formal sector jobs in the country and 25 per cent of the total jobs in the private sector. The four largest mining companies alone employed 56,300 people in 2012 , 98-99 per cent of whom were Zambian nationals. The Zambian Chamber of Mines reports that 14 per cent of the workforce is comprised of women.

These jobs represent direct employment in the mining sector. It is generally estimated that each job created by a mining company generates two to four jobs in the local economy. Most local procurement by mining companies is either for low skilled services (such as cleaning and catering “camp services”) or for goods imported by local companies, but manufactured elsewhere. Yet, because of shortcomings in collaboration between the public and private sectors, along with challenges in the business environment in Zambia, the potential for indirect job creation has not been significantly exploited. Accordingly, this kind of employment creation remains a national development priority.

Multinational enterprises (MNEs) operating in host mining communities can ensure the local economy further benefits by establishing business linkages with local enterprises that have a positive impact on job creation and enterprise development. In this context, the ILO is playing an active role in facilitating dialogues between the key stakeholders in the mining sector and in promoting inclusive growth for the realization in Zambia of the 2030 Agenda for Sustainable Development.

A partnership approach

Building on the recommendations of the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), the ILO has implemented a two-pronged approach to foster the creation of more and better jobs in the Zambian mining sector and has helped identify ways to strengthen dialogue, improve working conditions and promote business linkages between large mining companies and local SMEs.

On the one hand, it supported the creation of a Tripartite Partnership Committee for the Mining Sector (TPCM), which functions as a subcommittee of the Tripartite Consultative Labour Council, in order to strengthen industrial relations. The TPCM has 21 standing members and a mandate to implement measures to strengthen industrial relations and labour law compliance across the sector. The move also strengthens government capacity to promote sound industrial relations and international labour standards in the mining sector. At the same time, it also has enhanced the capacity of trade unions to better represent and serve their members, particularly through workplace cooperation and collective bargaining.

Since 2013, the ILO has been facilitating consultations between the government of Zambia, mining companies, and employers’ and workers’ organizations to identify how to effectively promote job creation and enterprise development in the country’s mining communities, and in the process boost inclusive socio-economic development.

To support the dialogue process and its follow-up, the ILO commissioned a series of studies to identify ways in which mining companies in other countries contributed to local economic development. The studies sought to identify both the main constraints facing mining companies in their efforts to increase local procurement as well as the obstacles facing SMEs responding to such opportunities in host mining communities. The studies found, for example, that MNEs often face challenges to finding providers who can comply with the scale and quality of services required, while a lack of finance and business skills seriously constrains the ability of SMEs to participate in tenders and start doing business with large mining companies. Representatives of the government, employers and workers also went with ILO support on a study tour to mining countries in the Americas (Chile and Peru) to learn from their experiences in closer aligning mining companies operations with national development and inclusive growth priorities and the public policies needed to that effect. The ILO also produced a policy note on Inclusive business practices in Africa’s extractive industries to inform stakeholders about different policy options to promote employment creation, including indirect jobs.

The studies and conclusions of the tripartite study tour were presented at a high-level tripartite dialogue in November 2013, involving government (Ministry of Mines and Ministry of Labour), employers’ and workers’ organizations, Chamber of Mines, mining companies and representatives of the home countries of the mining companies (ambassadors and economic counsellors). The participants identified the need to strengthen sectoral dialogue and further job creation through enhanced skills developments and business linkages as key components to expanding the contribution of the Zambian mining sector to national economic and social development.

The way forward

The mining sector in Zambia is a powerful source of job creation, both within the sector as well as indirectly in the local economy. In order to leverage this capacity to multiply the number of indirect jobs, the ILO has worked hand-in-hand with the country’s social partners to promote a dialogue that can turn words into action and benefit all parties concerned. A key element has involved helping identify new ways of building links between large mining companies and local small and medium enterprises (SMEs) that will improve capacity to create jobs. This dialogue has brought together the government, employers’ and workers’ organizations, mining companies and international and national development agencies to discuss how to build stronger partnerships with MNEs for sustainable development.

The results have been the development of short-term action plans to translate the principles of the MNE Declaration into action and a call for a continued national dialogue on the engagement of multinational enterprises in Zambia, with the ultimate goal of harnessing their potential to contribute to inclusive jobs growth and enterprise development.

Go to the MNE Declaration web site